As the islands have no aboriginal inhabitants, scholars have suggested different histories for the settlement of these islands. Archaeological evidence supports the existence of human settlement in the region around 1500 BC. The islands have long been known to sailors, as indicated by an anonymous reference from the first century AD to the region in Periplus of the Erythraean Sea. The islands were also mentioned in the Buddhist Jataka stories of the sixth century BC. Islam was established in the region when Muslim missionaries arrived around the seventh century. During the medieval period, the region was ruled by the Chola dynasty and Kingdom of Cannanore. The CatholicPortuguese arrived around 1498 but were expelled by 1545. The region was then ruled by the Muslim house of Arakkal, followed by Tipu Sultan. On his death in 1799, most of the region passed on to the British and with their departure, the Union Territory was formed in 1956.

Ten of the islands are inhabited. At the 2011 Indian census, the population of the Union Territory was 64,473. The majority of the indigenous population is Muslim and most of them belong to the Shafi school of the Sunni sect. The islanders are ethnically similar to the Malayali people of the nearest Indian state of Kerala. Most of the population speaks Malayalam with Mahi (or Mahl) being the most spoken language in Minicoy island. The islands are served by an airport on the Agatti island. The main occupation of the people is fishing and coconut cultivation, with tuna being the main item of export.

One of the earliest references to the region is by an anonymous author in the Periplus of the Erythraean Sea.[6] There are references to the control of the islands by the Cheras in the SangamPatiṟṟuppattu. Local traditions and legends attribute the first settlement on these islands to the period of Cheraman Perumal, the last Chera king of Kerala.[7] The oldest inhabited islands in the group are Amini, KalpeniAndrott, Kavaratti, and Agatti. Archaeological evidence suggests that Buddhism prevailed in the region during the fifth and sixth centuries AD.[6] According to popular tradition, Islam was brought to Lakshadweep by an Arab named Ubaidulla in AD 661. His grave is located on the island of Andrott.[8] During the 11th century, the islands came under the rule of the Late Cholas[6] and subsequently the Kingdom of Cannanore.[9]

In the 16th century, the Portuguese ruled the seas between Ormuz and the Malabar Coast and south to Ceylon. As early as 1498, they took control of the archipelago (called Laquedivas by them), later on to exploit coir production, until the islanders expelled them in 1545. In the 17th century, the islands came under the rule of Ali Rajahs/Arakkal Bheevi of Kannur, who received them as a gift from the Kolathiris. The islands are also mentioned in great detail in the stories of the Arab traveller Ibn Batuta.[10]

On 1 November 1956, during the reorganization of Indian states, the Lakshadweep islands were separated from Madras and organized into a separate union territory for administrative purposes. The new territory was called Laccadive, Minicoy, and Amindivi Islands before adopting the Lakshadweep name on 1 November 1973.[12]

Satellite picture showing the atolls of the Lakshadweep except for Minicoy

Lakshadweep is an archipelago of twelve atolls, three reefs and five submerged banks, with a total of about thirty-nine islands and islets. The reefs are in fact also atolls, although mostly submerged, with only small unvegetated sand cays above the high-water mark. The submerged banks are sunken atolls. Almost all the atolls have a northeast-southwest orientation with the islands lying on the eastern rim, and a mostly submerged reef on the western rim, enclosing a lagoon. It has 10 inhabited islands, 17 uninhabited islands, attached islets, 4 newly formed islets and 5 submerged reefs.[14]

The Aminidivi subgroup of islands (consisting of Amini, Keltan, Chetlat, Kadamat, Bitra, and Perumal Par) and the Laccadive subgroup of islands (comprising mainly Androth, Kalpeni, Kavaratti, Pitti, and Suheli Par), both subgroups having a submarine connection between them through Pitti Bank. Together with Minicoy Island, a lonely atoll located at the southern end of the 200-km-broad Nine Degree Channel, they form the Coral Islands of India in the Arabian Sea. All these islands have been built up by corals and have fringing coral reefs very close to their shores.[15]

Lakshadweep forms a single Indian district and is governed by an administrator appointed by the President of India under article 239 of the constitution. The present administrator is Mr. Farooq Khan IPS[31] There are 10 Sub Divisions of the territory. In Minicoy and Agatti the Sub Division is under a Deputy Collector while in the remaining 8 islands developmental activities are coordinated by Sub Divisional Officers. The Collector cum Development Commissioner who is also the District Magistrate oversees matters coming under District Administration, such as revenue, land settlement, law and order. The District Magistrate is assisted by one Additional District Magistrate and Ten Executive Magistrates with respect to enforcement of law and order. Administrator in his capacity as Inspector General of Lakshadweep Police has command and control of the Lakshadweep Police. Administration Secretariat is in Kavaratti.[32] The union territory comes under the jurisdiction of the Kerala High Court at Kochi along with a system of lower courts.[33] The territory elects one member to the Lok Sabha (lower house of the Parliament of India).[34]

Most people of Lakshadweep are descendants of migrants from the Malabar Coast of southwest India and the islanders are ethnically similar to coastal Kerala's Malayali people. More than 93% of the indigenous population are Muslims, and the majority of them belong to the Shafi School of the Sunni Sect. The southernmost and second largest island of Minicoy has an ethnically Mahls population that are native to the Maldives.[14][37]

The inhabitants of Lakshadweep were known to practice different religious customs. Then Islam was propounded by the Sheikh Ubaidullah.[39]

The spread of Islam has contributed to the religious identity of Lakshadweep. Eid-ul-Fitr, Muharram, Eid-ul-Adha and Milad-un-Nabi are the prominent occasions when the people of the island gather in various mosques.

Religious observance in Lakshadweep is characterized by certain festivals that are found in its core ethnic groups. Moulood is one such religious event when the islanders offer prayers to the divine power and eat in groups. The festival of Ratheeb is another uncommon occasion which originated in the Kavaratti region of Lakshadweep. The grave of Sheikh Kasim, one of the respected saints is praised during Ratheeb by the people of the island to gather his holy blessings.

Malayalam with Malayalam script was introduced as the official language of Lakshadweep during the British raj. Previously a type of Arabic script (Arabi Malayalam) was used for the language. The policy was continued by the Indian government. Malayalam serves as a link language on the islands including on the Mahl dominated Minicoy Island.[42]
The dances here include:-Lava Dance, Kolkali dance & Parichakli Dance.

Lakshadweep's gross territorial domestic product for 2004 is estimated at US$ 60 million at current prices. There is little economic inequality in Lakshadweep and the poverty index is low. Coconut fibre extraction and production of fibre products is Lakshadweep's main industry. There are five coir fibre factories, five production demonstration centres and seven fibre curling units run by the government of India. These units produce coir fibre, coir yarn, curled fibre and corridor mattings.[43]

Lakshadweep comprises the only coral atolls of the country. With a vast lagoon of 4,200 km2 (1,600 sq mi), it has territorial waters of 20,000 km2 (7,700 sq mi), Exclusive Economic Zone (EEZ) of 4 lakh (400,000 km2 [150,000 sq mi]) and coastal line of about 132 kilometres (82 mi). There is an estimation of about one lakh tonnes (100,000 tonnes [110,000 tons]) of tuna and tuna-like fishes and about an equal quantity of shark in the sea around Lakshadweep. Fishing is the main livelihood of the islanders.[44] Freshly caught tuna is processed by drying it in the sun after cooking and smoking. The resultant product, known as 'mas', are popular products exported from these islands to southeast Asian countries.[45] Eleven workshops in islands and two boat building yards cater to the needs of fishermen. There are 375 boats in operation in Lakshadweep.[46]

Due to its isolation and scenic appeal, Lakshadweep was already known as a tourist attraction for Indians since 1974.[47] This brings in significant revenue, which is likely to increase. Since such a small region cannot support industries, the government is actively promoting tourism as a means of income in Bangaram and Kadmat islands. Bangaram is projected to become a major destination for international tourism.[48] Marine fauna are plentiful. Water sports activities such as scuba diving, wind surfing, snorkelling, surfing, kayaking, canoeing, water skiing, sportfishing, yachting and night sea voyages are popular activities among tourists. Tourists flock to these islands throughout the year, except during the southwest monsoon months when seas are extremely rough. The government has also proposed to set up two customs clearance check-in offices so that tourists can enter directly instead of getting permission from the nearest customs office in Kochi, which is 260 nautical miles (300 mi; 480 km) from these islands. These will be the smallest customs offices in India. Tourism is expected to get a big boost after these offices open as the islands lie on one of the busiest cruise ways.

A low-temperature thermal desalination plant opened on Kavaratti in 2005, at a cost of ₹50 million (€922,000). The experimental plant, which uses the temperature difference between warm surface seawater and much colder seawater at 500m depth to generate potable water as well as energy, was slated to produce 100,000 litres/day of potable water from seawater.[51][52] Production costs in 2005 were ₹220-250/m³ (€4.1-4.6/m³); the cost was supposed to drop to ₹30-60/m³ (€0.55-1.11/m³) with increased capacity.[53]

The technology was developed by the National Institute of Ocean Technology. It can be used to produce drinking water and also for power generation and air conditioning. In addition, the deep seawater contains extra nutrients for fish, an important source of food and income for the local population. The government plans to set up desalination plants with a capacity of 10 million litres/per day on all islands and coastal areas.[51] In 2009, the NIOT announced plans to build plants on Minicoy, Agatti and Andrott.[54]